The U.S. Department of Energy (DOE) today announced nine new energy performance contracting pilot projects that bring together U.S. and Chinese companies to boost the energy efficiency of buildings in China and reduce greenhouse gas emissions. A combination of clean energy retrofits and upgrades will save the selected facilities on energy costs over the lifetime of the contracts by making them more energy efficient. The savings on utility bills created through the facility upgrades will be used to pay for the projects over the terms of the contracts, and the improved facilities will continue to save money and energy after the contract terms have ended. The new projects support the efforts of both countries to work together to address climate change as recently formalized under the Paris Agreement.
China and the U.S. have years of experience in energy performance contracting and have a tremendous opportunity to reduce energy and water use and cut greenhouse gas emissions. The American companies partnering with Chinese firms will benefit by forging new partnerships to market their clean energy products and gain additional experience operating in China. For these reasons, the U.S. Department of Energy and China’s National Development and Reform Commission (NDRC) are working together, under the U.S.-China Climate Change Working Group announced by Secretary Kerry and his Chinese counterpart in 2013, to scale up these contracting opportunities by promoting multiple technology retrofits, new contract models, third-party financing and stronger measurement and verification protocols.
DOE’s Acting Assistant Secretary for Energy Efficiency and Renewable Energy, David Friedman, announced the projects today at the 7th annual U.S.-China Energy Efficiency Forum (EEF). The Beijing event, organized by NDRC and DOE, brings together more than 150 government, industry, and nonprofit leaders from the U.S. and China to discuss bilateral collaboration on energy efficiency and highlight cooperative efforts, including energy performance contracting.
EEF is the premier platform for senior U.S. and Chinese officials and industry to assess the progress of joint activities under theU.S.-China Energy Efficiency Action Plan. This plan was announced by Presidents Obama and Hu in 2009 with the goal of discussing emerging market and policy developments, and exploring trade and investment opportunities. The EEF has facilitated 30 institutional or commercial partnerships resulting in millions of dollars of trade and investment since the first EEF in 2010.
The U.S.-China Energy Performance Contracting (EPC) pilot projects were formally recognized today by NDRC and DOE for using a combination of innovative financing models, standard measurement and verification protocols, integrated systems approaches, and achieving at least 20% energy savings building-wide or at least 1,000 tonne coal equivalent (TCE) across retrofitted systems in industrial facilities.
- General Electric and Tongyu Heavy Industry Co., Ltd.: This GE-led project’s features include the implementation of an energy management system, efficient lighting, water savings, and distributed rooftop solar power generation on Heavy Industry Co., Ltd.’s property. The project is expected to achieve 23% savings on average across affected systems, yielding a net reduction of 9,865 TCE in annual energy use. This project is part of GE’s Green Supplier Initiative, which is advancing the EPC market by bringing together energy service companies (ESCOs), industrial facilities, suppliers, and financiers to provide integrated retrofit solutions to industrial facilities like Tongyu’s.
- General Electric and Ningbo Harmony: GE will partner with the ESCO, Ningbo Harmony, in the industrial park retrofit of the Ningbo Petrochemical Economic and Technology Development Zone. Improvements will include a distributed energy station for combustible chemical process gases, energy microgrid control center, a new maleic anhydride reactor, an energy efficient generator, waste heat recovery, and a bubbling fluidized bed boiler retrofit. The project is expected to save 47,600 TCE of energy use per year. This project is unique in using a mix of various financing methods including state-owned capital, the Ningbo Low-Carbon Industry Fund, and a Hangzhou Bank loan for energy efficiency projects.
- Trane, Otis, and Yantai Dongfang Energy Technology: Trane and Otis are selected technology vendors in an energy service agreement between ESCO Yantai Dongfang Energy Technology and Yantai Hi-Tech Science and Entrepreneurship Development Co., Ltd. to retrofit the heating and cooling systems, lighting systems, and elevators at Yantai Hi-Tech’s property. This project is anticipated to save 20% energy compared to its original energy use, totaling 1,440 TCE saved per year. This energy service agreement project uses hybrid financing methods, including a bank loan and third-party investment.
- Carrier and China Aviation International Construction and Investment: Carrier by United Technologies is partnering with the ESCO, China Aviation International Construction and Investment, on a project to retrofit the Beijing Yunhu Resort. The retrofit covers the heating system, service hot water, and air conditioning and lighting systems across several buildings within the resort and is expected to save 40% in annual energy use. After installation, the ESCO will use the International Performance Measurement and Verification Protocol (IPMVP) to monitor results.
- Archimedes Controls Corporation and Shenzhen CNSECOM Technology Co., Ltd: Archimedes Controls Corporation is the supplier supporting the ESCO, Shenzhen CNSECOM Technology Co., Ltd., to retrofit the Xiamen Customs Building. This project will achieve energy savings of 24%, which will be measured using IPMVP. Clean energy technologies to be employed include an energy management platform, chilled water plant, variable frequency drives for pumps and cooling tower fans, LED lighting and controls, efficient drinking water equipment, an energy recovery system for elevators, and solar hot water control.
- Trane and China Southern Power Grid Synthesis Energy: Trane is working with the ESCO, China Southern Power Grid Synthesis Energy, to retrofit the air conditioning system, hot water, heating, and lighting of the Guangdong Hotel. This project will produce energy savings of almost 45% compared to its original annual energy use. The project will monitor and verify these savings using IPMVP.
- Johnson Controls Inc. and China Southern Power Grid Synthesis Energy: Johnson Controls Inc. serves as the supplier to the ESCO, China Southern Power Grid Synthesis Energy, and will install new air conditioning, lighting, and itemized metering in Zhongshan’s Power Supply Bureau Electric Power Dispatching Building. The building improvements will save about 20% energy compared to its original annual energy use. This project demonstrates that utilities can also save energy in their facilities and lead by example. IPMVP will be used to monitor and verify savings.
- Johnson Controls Inc. and Century Microentropy Technology: Johnson Controls Inc., along with Beijing Qin Ze Heng Tong Technology and Guangzhou Yuxin Air Conditioning Equipment, are providing technologies to the ESCO, Century Microentropy Technology, in a retrofit of Yingli Solar’s Baoding Facility. The retrofit is focused on improving heat recovery, the air conditioning system and its control, and the energy management system. The project will use IPMVP to monitor and verify its estimated 1,096 TCE of energy savings per year.
- Boehmer, Honeywell and Beijing KRSD Heating Investment: Boehmer and Honeywell are suppliers in an energy service agreement led by the ESCO, Beijing KRSD Heating Investment, to retrofit the heating system in the Jingneng Garden Residential District. The project is financed by the China Lustrong Group. Old boilers will be replaced with more efficient ones, the pipeline system will be improved, and smart controls for the heating system will be installed. The improvements will save 30% in annual energy use.